Night Wire

 

The
economical advantages of commerce are surpassed in importance by
those of its effects, which are intellectual and moral. It is hardly
possible to overrate the value, in the present low state of human
improvement, of placing human beings in contact with persons
dissimilar to themselves, and with modes of thought and action unlike
those with which they are familiar.

There is no nation which
does not need to borrow from others, not merely particular arts or
practices, but essential points of character in which its own type is
inferior.

It may be said without exaggeration that the great
extent and rapid increase in international trade, in being the
principal guarantee of the peace of the world, is the great permanent
security for the uninterrupted progress of the ideas, the
institutions, and the character of the human race.
(John
Stuart Mill, Principles of Political Economy, 1848; Thanks to
Columbia University Prof. of Economics and Law, Jadish Bhagwati, for
directing me to the quotation.)

Two things are going
to happen early Mar. 1, while most of us are sleeping. The first is
that a bear trap will be sprung on the hedge funds and other
speculators who have been shorting the euro and buying credit default
swaps on Greek debt. Many of those who took short positions in the
currency and the Greek bond market were copy-cats with no real
experience of euro realities.

At 9:15 Monday
morning (Athens time) the Finnish EU finance commissioner will meet
with President Papandreou and close a deal providing finance in
return for a further 4% cut in the Greek deficit. The money will come
not from the state coffers of northern Europe, but from para-state
entities like the Caisse des Dépôts
et des Consignations of France and the Kreditanstalt fuer
Wiederaufbau of Germany. The Dutch, who have no government (it fell
last week), apparently are not participating. About half of Greek
financing needs would be provided, about euros 24 bn.

The
way I know this is that the BBC,
Reuters,
Bloomberg,
and the Business
Week,
and Wall
St. Journal
websites all hint at the same outcome without citing sources. If any
of you are hedge fund managers please set your alarm clock. If you
own hedge fund shares, set your alarm clock and contact the managers